A chainsaw-wielding Elon Musk caused quite the stir in Washington earlier this year when Donald Trump established the Department of Government Efficiency to reduce government spending and cut jobs. According to some estimates, hundreds of thousands were laid off or targeted for layoffs, though Musk has since left DOGE and some employees have been asked to return to work.

But here’s a “fun fact” that Taylor Schleich, an economist with National Bank of Canada, has unearthed from recent data that goes against popular belief.

Canada has actually cut a bigger share of federal jobs than the United States this year. According to Statistics Canada’s latest Survey of Employment, Payrolls and Hours, employment in Canada’s federal government fell 3.8 per cent through July, while the U.S. federal workforce dropped only 3.1 per cent through August, he said.

The decline in Canada’s federal workforce started before 2025 and the election of Prime Minister

Mark Carney , Schleich points out. The 2024 budget under former Prime Minister Justin Trudeau aimed to save money through attrition, and since early that year the federal workforce has shrunk by about 5 per cent.

Mind you, some would argue there was greater scope for job cuts in Ottawa. Thanks to the surge in hiring through most of Trudeau’s tenure, Canada still employs a larger share of federal workers, he said. This wasn’t always the case. Before 2020 Canada had a smaller government footprint than the United States.

There’s also the possibility that America’s public service is about to get even smaller if Trump carries through on his threat to cut more U.S. agencies and jobs during the

government shutdown now going on. Schleich said whether the job-cutting trend continues in Ottawa is hard to say, as we won’t get a look at the federal spending plans until Nov. 4.

But to get back to the size of the federal workforce in 2015 before Trudeau took power would require cutting 14 per cent of employees or about 50,000 jobs, he said.

“It’s hard to imagine this playing out as the government is planning to expand its reach in a big way (e.g. via the new Build Canada Homes or the Major Projects Office),” he said.

“What is clear is that fewer federal workers won’t be sufficient to offset the cost of a growing list of spending commitments and forgone revenues via tax cuts.”

The parliamentary budget officer last week forecast that the federal government will post an annual deficit of $68.5 billion this year, up from $51.7 billion last year.

Which leads us to another of the National economists’ “believe it or not” revelations.

Canadian governments, provincial and federal, are currently tapping debt markets just as aggressively as the United States, whose rising obligations have alarmed investors around the world.

Five months into the fiscal year, the Government of Canada has auctioned $138 billion of new bonds, up 44 per cent from the year before, said National. Add in the provinces’ $81.5 billion, and the grand total comes to $220 billion in bond supply, a monthly pace equal to 1.4 per cent of

gross domestic product. The $2 trillion in gross Treasury bond supply from the U.S. in the same period, on the other hand, amounts to 1.3 per cent of GDP.

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Another change the age of AI has thurst upon us is electricity is becoming a bigger drive of inflation.

“The voracious appetite for power from data centres has sent once-sleepy electricity demand skyward,” said Douglas Porter, chief economist of BMO Capital Markets, in a recent note.

This really shows up in the United States, where electricity prices have climbed an average of 6.5 per cent a year over the past five years. Electricity’s weight on the consumer price index is about 2.5 per cent, so the increase has added 0.15 percentage points to inflation, he said.

Canada hasn’t seen the same surge mainly because prices here are more regulated and demand less “frothy,” said Porter. Canadian costs are up just 1.4 per cent in the past year, and the average annual increase over the past five years is about half that of the United States’.

  • Today’s Data: Americans won’t be getting U.S. jobs and unemployment rate data today because of the government shutdown
  • Inside Nova Scotia’s $60-billion wind gamble to power Canada’s clean energy future
  • Financial lessons and missteps you can learn from Billy Joel
  • CRA hits taxpayer with $5,000 in penalties for mistake in reporting U.S. holdings

If you own “specified foreign property” where the total cost at any time in the year is more than $100,000, you’re required to complete Form T1135, Foreign Income Verification Statement with your personal tax return.

While most of us would agree that a Swiss bank account with a value of more than $100,000 in it should be reported, you might not realize that shares of foreign corporations such as Apple Inc. or Nvidia Corp. must also be disclosed, even if held in a Canadian non-registered brokerage account.

Tax expert Jamie Golombek fills us in on a case where a taxpayer was hit with $5,000 in CRA penalties for making a mistake in reporting U.S. holdings.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Read on Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

Financial Post on YouTube

mortgage rate page for Canada’s lowest national mortgage rates, updated daily. Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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